Brisbane’s housing market appears to be defying the apparent slowdown in price gains in Australia.
CoreLogic data shows a “re-acceleration” in the growth of dwelling prices in Brisbane.
In fact, residential property values in the Queensland capital rose by 2.5% in October, the highest level of growth across all capital cities in the month.
CoreLogic head of research Eliza Owen said Brisbane’s recent gain was the highest monthly increase across the city through the current upswing and the strongest since November 2003.
“The Brisbane housing market has seen some extraordinary tailwinds through COVID-19, including strong interstate migration, normalised remote work and low exposure to the virus itself,” she said.
Despite these gains, the median dwelling price in Brisbane remains significantly affordable at $640,000 compared to Sydney’s $1.1m and Melbourne’s $780,000.
Adelaide following Brisbane’s footsteps
Adelaide’s housing market also defied the slowdown, hitting a monthly gain of 2% in October.
Similar to Brisbane, Adelaide’s recent monthly gain was its highest since 2003.
The momentum was driven by Adelaide’s 2.2% gain in house prices, but unit values also clocked a stable gain over the month at 1%.
“The Adelaide dwelling market has recently benefitted from a stronger interstate migration trend, relative affordability to other capital cities and a low level of available properties for sale, with total listings sitting 34.1% below the five-year average,” Ms Owen said.
Fastest price slowdown
Of all capital cities, Perth reported the biggest slowdown in price growth in October.
Perth property prices peaked earlier this year at 2.7% before clocking a sharp slowdown in June when prices only grew by 0.3%.
“This slowdown in momentum may be due to a few different factors, including extended state border closures, renewed affordability constraints for first home buyers and a recent uptick in new listings volumes,” Ms Owen said.
Sydney and Melbourne reported the second and third fastest slowdown in price growth in October.
Price gains in Sydney peaked at 3.7% in March and have rapidly slowed to 1.5% in October.
“The slowdown in growth rates is likely being triggered by affordability constraints, and the higher levels of new listings being added to the market in recent weeks,” Ms Owen said.
Meanwhile, recent headwinds have hampered activity in Melbourne, where price growth has slowed from a peak of 2.4% to 1% in October.
“More recently, Melbourne saw the largest uplift in new listings volumes across the capital cities,” Ms Owen said.
Interestingly, Melbourne’s recent price gain was still well above the decade average monthly gain at 0.4%.
Outlook for price gains
Ms Owen said while the rate of property gains is slowing each month, the reduced rates are still relatively high compared to the decade average of 0.4%.
“Through 2022, monthly growth rates are expected to continue declining. This is due to a combination of factors, including a tighter credit environment, more normalised listings levels, and affordability constraints putting downward pressure on demand,” she said.
The projection of a likely cash-rate hike in 2023 and the tighter lending environment, Ms Owen said, should also be monitored as these would likely put downward pressure on prices.
Photo by Brisbane Local Marketing on Unsplash.
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